Will My Tax Code Change in 2026/27?

The Standard Code: 1257L Stays the Same

The most common UK tax code is 1257L. In 2026/27 it remains unchanged because the Personal Allowance is still £12,570 (frozen since 2021/22). The number 1257 = PA ÷ 10 = £12,570 ÷ 10 = 1,257.

If you had 1257L in 2025/26 and nothing significant changed in your tax affairs, you will almost certainly keep 1257L in 2026/27.

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When Your Code Does Change

Despite the standard code staying the same, HMRC adjusts individual tax codes for a variety of reasons:

1. Benefits in kind (company car, private health, etc.)

If your employer provides taxable benefits (car, private medical insurance, gym membership, interest-free loans over £10,000), HMRC includes their taxable value in your tax code. A company car with a P11D value of £5,000 would reduce your code from 1257L to 757L — collecting the extra tax through reduced personal allowance.

2. Underpaid tax from a previous year

If you underpaid tax in 2025/26 (e.g., because you had two jobs simultaneously and were on the wrong code), HMRC may collect the underpayment by reducing your 2026/27 code. A £500 underpayment would reduce your code by 50 (i.e., from 1257L to 1207L).

3. Untaxed income

Rental income, savings interest above your Personal Savings Allowance, or income from side work that HMRC knows about may be included in your tax code. This avoids you having to file a Self Assessment return for relatively small amounts. Each £100 of untaxed income reduces your code number by 20 (at 20% basic rate).

4. Claim of expenses or allowances

If you've claimed flat rate expenses (e.g., £60/year uniform allowance), your code may be higher: 1263L rather than 1257L.

5. Marriage Allowance

If you receive a transfer of £1,260 of your partner's allowance through Marriage Allowance, your code will be 1383L (1257 + 126 = 1383). Your partner's code will show 'M' suffix.

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When HMRC Notifies You

HMRC generally sends coding notices (P2 — PAYE Coding Notice) ahead of the new tax year:

You may not receive a paper P2 if you're registered for paperless notices on your HMRC online account — check there instead.

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Understanding Tax Code Letters

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What to Do if Your Code is Wrong

Tax codes can be wrong — and the consequences are real: a code that's too low means you overpay tax (you'll get a refund at year end or via P800); one that's too high means you underpay (you'll owe it later).

To check your code:

1. Log into HMRC Personal Tax Account at gov.uk
2. Check your most recent payslip
3. Review your P2 coding notice if received

If you think your code is wrong:

• Contact HMRC on 0300 200 3300 or via the online account
• Tell your employer's payroll team if the code is definitely wrong (they cannot change it without HMRC instruction, but can help you escalate)
• If underpayment or overpayment is identified, HMRC will usually adjust via PAYE over the next year rather than demanding immediate payment (for underpayments under £3,000)